A big part of the problem is that after the infantry throws the flare, red smokes just sits there for >10 seconds. This gives the enemy plenty of time to notice it and move their troops.
Cons are fine. Penals, however, should be looked at. 30 more manpower than Conscripts but they perform about the same. Either give them a slight buff, or bring the cost down to 240 MP.
Also, the satchel charge bug needs fixing. Relic, it's been a while...